By Richard Dressel, Business Manager IBEW Local 164
As renewable energy gains an even stronger foothold as the “power source of choice” in our homes, office buildings, schools and retail centers, industry professionals are pooling their knowledge and resources to respond to an influx of end-user needs. These multi-disciplinary partnerships are now being aggressively sought by municipalities and commercial/industrial/retail owners seeking to convert the sun’s rays into the most efficient alternative power supply and significant cost-savings.
These new solar alliances allow each entity to retain its autonomy while collaborating to assist public and private building owners convert to solar-based energy systems. Ideally, these partnerships involve an architectural firm, legal counsel and a contractor/installer group certified in photovoltaic (PV) technology. As a complete, “turn-key” one-stop resource, the primary focus is to literally walk clients through the steps of “going green” in a streamlined and cost-competitive manner.
Professional and advisement services must be specially designed to navigate the entire process of converting from traditional electricity to solar power. These include developing architectural drawings and project specs; addressing bonding issues on behalf of local and county entities for the purchase and installation of a PV system; and filing the necessary documents for rebates and incentives from utility companies, as well as the state and federal government.
In addition, each member of the partnership must be committed to educating elected officials, business owners and the general public. Key message points include noting that solar energy reduces greenhouse emissions, reverses global warming and climate change and saves money at a time when cost and efficiency are vital. Most importantly, people need to understand that solar energy has been proven to be more reliable than power company-generated electricity.
In New Jersey, a partnership that includes IBEW Local 164 serves as a nationwide model for similar alliances. Comprised of DMR Architects, a full-service firm specializing in LEED design and construction administration, and the legal firm DeCotis, Fitzpatrick, Gluck, Hayden and Cole, LLP, as well as Local 164 signatory contractors and electricians, the group has provided advisement and professional services to more than 300 clients.
While incentives to install solar-based systems have rendered this renewable energy alternative more affordable, especially for public and commercial buildings, the total estimated installation cost can be staggering. A typical system can easily exceed $300,000.
On the surface, this expenditure can be somewhat overwhelming. In New Jersey, with the Clean Energy Program rebate, as well as the federal tax credit and incremental system deductions, the total net cost for a business can be reduced by approximately 40 percent. Once cost-prohibitive, buildings with solar panels no longer have to wait 15 years to achieve a return on the installation investment.
Within the public sector, greater savings can be attained at a rapid pace, especially at schools. Through municipal bond financing, a local board of education can pay down the debt through rebates and incentives. Since the buildings are closed three months of the year, and power usage is at a minimum, the panels serve as a power-generating plant, creating solar renewable energy certificates, also known as SRECs. When the building is occupied, the panels supplement the power that is needed.
Recently, the Local 164 consortium worked with a local municipality to demonstrate how tax-exempt bonding for the acquisition and installation of rooftop solar panels on all eight schools throughout the township would actually generate revenue. In addition to eliminating out-of-pocket installation expenses, these systems would yield valuable income-producing SRECs. This scenario is a win-win for local officials as well as the entire community.
There is no doubt that the recent economic downturn has served as a catalyst for virtually every public and private entity to consider a solar energy system in order to reduce electricity costs. As a result, many have entered into power purchase agreements (PPAs) in order to finance the installation of rooftop solar modules.
Buyer beware. Under these agreements, it is the utility company that retrieves the federal tax deductions (30 percent annually over five years), accelerated solar panel depreciation (50 percent over the same five years) and the SRECs. Each time a solar electric system produces 1,000 kHz of electricity, a SREC is issued. These certificates can be traded for cash.
While the consortium can negotiate PPAs that traditionally reduce electricity costs by up to 25 percent on behalf of private building owners, this expert team also can provide municipalities with alternative equipment financing options. Through low-interest bonding, local and county governments can gain the upper hand in contractual negotiations with the utility company by tapping into this form of low-interest financing. This eliminates the long-term commitment and an even greater return on the investment.
Just like the state and federal rebates, members of the partnership can offer their own incentives. Local 164, through its signatory contractors, offers a special 20-year warranty on the panel installations to complement the existing manufacturer warranty. Since a solar system has no moving parts, maintenance costs over its lifetime are minimal. Most panels have a 25-year warranty with an expected lifespan of more than 40 years.
Although solar power has been around for more than 50 years, the technology still presents an obstacle course of uncertainties. Through a collaborative, multi-disciplinary team approach, building owners can, and will, achieve their goal of being socially and financially responsible.
About the Author
Richard Dressel has served as business manager of IBEW Local 164, based in Paramus, N.J., since 1997. In this capacity, he oversees all of the Local’s business-related activities and is a recognized leader in union workforce issues. Dedicated to providing its more than 3,900 members with integral services that elevate the level of electrical and telecommunications expertise, Local 164 is committed to making life better within the communities it serves. The Local includes electricians active throughout Bergen, Hudson and Essex counties as well as telecommunications workers contracted throughout the state.
Today, the IBEW includes more than 800,000 members worldwide.
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